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Is insurance required for boats in Louisiana?

On Behalf of | Jun 17, 2024 | Car Accidents

The short answer to the above question is that the state of Louisiana does not legally require boat owners to purchase boat insurance. This rule (or lack of one) applies to privately owned and commercial boats. However, there are certain situations where boat insurance might be necessary. For instance, if you have financed the purchase of your boat, your lender may require you to have boat insurance until you pay off the loan.

Why Lenders May Require Boat Insurance

Lenders often require boat insurance as a condition for financing a boat purchase. They do this because the boat serves as collateral for the loan, and the lender wants to ensure their investment is protected. The insurance payout can cover the remaining loan balance if the boat is damaged or destroyed. If a boat owner fails to provide proof of insurance or allows it to lapse, lenders may forcibly place a marine insurance policy onto the boat.

The benefits of boat insurance

More than simply serving as collateral for a boat loan, insurance offers several benefits. Here are a few key ones:

  1. Liability coverage: Boat insurance covers your liability if someone severely injures themself on your boat. It can protect you from potentially significant financial expenses or a lawsuit.
  2. Damage coverage: Boat insurance can cover accidental damage from collisions, theft, fire and natural disasters. This means you won’t have to bear the total cost of repairs or replacement in the event of such incidents.
  3. Medical payments coverage: This pays the medical bills of someone injured while on your boat or boarding or leaving your boat.

We should note that most policies offer a wide range of liability limits, deductible amounts, and extra coverages to choose from.

Providing peace of mind

It’s always a good idea to consider your individual circumstances and the level of risk when deciding whether to purchase boat insurance. It offers a wide range of protections and ensures peace of mind for both the boat owner and the lender in case of financed purchases. While the cost can seem like an unnecessary annual expense, protecting your floating investment from risk can be a wise choice, especially considering the severe weather and flooding we often see here in Louisiana.


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